Thursday, February 19, 2015

Trek Leather Owner Seeking Supreme Court Reivew

Harish Shadadpuri, the principal of Trek Leather who the Court of International Trade and Federal Circuit held personally liable for corporate negligence, has asked the Supreme Court to review his case. This is one of the most interesting customs cases in a long time. Shadapuri was initially vindicated  by the Federal Circuit, which then reversed course and unanimously held he was liable as a "person" who "introduced" merchandise to the United States through negligence.

This is the last chance for Shadapuri and the last chance for the law to recognize that while corporations may be people, and people are "persons" under the customs penalty law, the corporate people and liable persons are not necessarily the same. In most other cases involving personal liability for corporate acts, the government needs to show that the corporation was nothing more than an alter ego of the person. This is called "piercing the corporate veil" and is usually done under state corporate law. The Federal Circuit interpreted the penalty statue as creating direct personal liability on anyone who introduces goods to the U.S. That is potentially anyone who provides information that Customs relies upon in making decisions regarding admissibility and liquidation. That is a lot of people.

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